PET $PENDING GROW$ EVEN A$ THE PET OWNER$HIP POPULATION DWINDLE$!

PET $PENDING GROW$ EVEN A$ THE PET OWNER$HIP

POPULATION DWINDLE$!

The main story from the 2015-16 APPA Nat’l Pet Owners Survey is that pet ownership has dropped

by 3% yr over yr while pet spending has increased by 4.4%! In the light of constant pet population

increases, it’s amazing that there has been decline. How can this be for the most pet populated planet in

the galaxy? The answer is a generational “peton” (hand off) of sorts. Baby Boomers (who have been the

quintessential generation for pet parenting and pet nurturing and hence growing the pet kingdom) are starting to become

less well able to perpeturate their life-long campaign is a caring & loving way. Frankly, they are older,

less well able economically and physically attend to their treasured pets (Pet Age 3/31/15). They are

being replaced by Millennials (MLLNNLS) who are very slowly and very cautiously assuming their new

roles as pet parents. They are much more likely to spend more per pet (in terms of toys, high tech pet

gadgets, pet therapy, etc) than any other age group. Pet ownership may also be a very appropriate way for

them to dive into the world of family responsibility both financially speaking and relationship wise.

Indeed, the pitter-patter of paw steps may precede the baby steps of parenthood.

In sum according to the APPA Nat’l Pet Owners Survey 2013-2014, 68% (82 M) of American

households own pets. (WHO “owns” a pet or pets are legal and economic questions. WHO is the emotional head of the

household is yet another important question.) By the end of 2014, pet spending had increased an estimated

50% over the last 10 yrs with a total spend of 58.51 B. The estimate for pet spending in 2015 is

$60.6 B (According to the CIA World Factbook, if that estimate was the GDP of a nation it would be the 92rd biggest GDP

in the world [Top 40%] of 226 recorded national GDPs). Costa Rica #91 ($61.4 B) with Bolivia and its GDP of

$59.10 B being #92. Given the US’s current population of pets (at 312 M, Table 1), there are 0.98 pets

(including each fish) for every man, women, & child in the US. T-2 tells us clearly that we are a land of dog

and cat households with 44% and 35% of American HH’s, respectively being dog & cat HHs. (According

to Euromonitor International the USA has more pets per population AND more dogs [1 dog per 4.1 people] & more cats [1

cat per 3.7 people] per population than any country in the world. Brazil has the 2

nd most cats [53.1 M]. [Just 4 the record, China has 1 dog per 49.3 people and 1 cat per 25.4 people. So while China

has caught the US with its GDP, we still are the pet capital of the galaxy.])

nd most dogs [35.7 M] with China having

T-1: USA Pets by Millions T-2: USA Pets Households by Millions

Category 2014 2015 Growth Category 2014 2015 Growth % of HH

Frshwtr Fish 145 95.5 -34.10% Dog 56.7 54.4 -4.10% 44.10%

Small Animal 18.1 12.4 -31.50% Cat 45.3 42.9 -5.30% 34.80%

Bird 20.6 14.3 -30.60% Frshwtr Fish 14.3 12.3 -14.00% 10.00%

Saltwtr Fish 13.6 9.5 -30.10% Bird 6.9 6.1 -11.60% 5.00%

Reptile 11.5 9.3 -19.10% Small Animal 6.9 5.4 -21.70% 4.40%

Cat 95.6 85.8 -10.30% Reptile 5.6 4.9 -12.50% 4.00%

Horse 8.3 7.5 -9.60% Horse 2.8 2.5 -10.70% 2.00%

Dog 83.3 77.8 -6.60% Saltwtr Fish 1.8 1.3 -27.80% 1.00%

Total 396 312.1 -21.20%

mikeroscopeudm.com

T-3: Pet Industry Exp. (09-14) T-4: Pet Spending by Category in Billions (2013 vs 2014)

Year Exp. $ B Δ Category 2014 2015* Δ

2015* $60.59 4.40% Food $22.26 $23.04 3.50%

2014 $58.04 4.10% Supplies /OTC Medicines $13.75 $14.39 4.70%

2013 $55.72 4.50% Vet Care (Including surgeries) $15.04 $15.73 4.60%

2012 $53.33 4.70% Live Animal Purchases $2.15 $2.19 1.90%

2011 $50.96 5.40% Pet Services: (Grooming & Boarding) $4.84 $5.24 8.30%

2010 $48.35 6.30% $58.04 $60.59 4.39%

2009 $45.50 — *Estimated

T-3 shows of the consistently of pet expenditure growth avging more than 4.7% per yr. w/o great fluctuation

T-4 codifies the fact there are fewer live animal purchases these days with a growth of less than 2% b/t 2014

& 15 (THX to Boomers). Then there is that extraordinary growth of Pet Services over 8% (THX, MLLNNLS) while

from 2014-15 spending from on Food, Supplies and Vet Care have grown from 31⁄2% to 4

THE COMING AGE OF PET PAMPERING

The keys to this new age of “pet pampering” are their owners. A remarkable 10% of ALL pet owners are new.

Generally speaking they are not middle age or older folks, but the youngest adults. Yes, were back to MLLNNLS.

As stated above, T-4 tells the story. It shows the difference in the growth of Pet Services rather then Live Animal

Purchases. This trend according to IBIS World Services is b/c of the growth of premium pet product and

services including “all natural and organic pet foods and treats and high end services such as pet therapy and pet

ONLY flights. These premium pet products and services are the province of dogs and cats who anchor the

industry and have keep pet spending vitalized.

In summation, the last recession taught us that pets basically are “recession proof” and now in our post-
recession economy we’ve discovered that newer young (MLLNNL) owners and their pet pampering by the

purchase of premium products and services are changing the pet industry again. Rather than Boomers flooding

the marketplace with new pets, MLLNNLS are flooding the marketplace with new purchasing, (premium products

& services). And as their discretionary income grows so will the premium pet products & service marketplace.

THE STATE OF PET-HOOD IN THE US, ANOTHER CIVIL WAR?

While Table 1 & 2 clearly tell us we are a nation of dog and cat lovers, we can find differences w/i the various states.

T-5 lists the TOP 10 Dog to Cat ratio states in the US. AR, NM and TX are the TOP 3. We find that ALL of the TOP 10 are

South of the Mason-Dixon Line. On the other hand T-6 notes that MA, MD & ME are the Top Cat-Dog ratio states. All of

the TOP 10 Cat to Dog are northern or north east states except for DC. We are unsure what it means except for the fact

that if the Civil War was fought b/t the TOP Dog to TOP Cat states vs the Cat to Dog states, the NORTH would still have

won meaning we’d bet on the dogs any day.

T-5: TOP 10 Dog-loving States T-6: TOP 10 Cat-loving States

State Cats (000) Dogs (000) Dog to Cat State Cats (000) Dogs (000) Cat to Dog

AR 810 1,097 1.35 MA 1,593 850 1.87

NM 533 703 1.32 MD 1,677 915 1.83

TX 5,565 7,163 1.29 ME 498 300 1.66

OK 1,041 1,327 1.27 VT 234 142 1.65

LA 877 1,115 1.27 CT 796 507 1.57

MS 668 846 1.27 D.C. 63 42 1.50

AZ 1,438 1,798 1.25 NH 309 212 1.46

TN 1,749 2,157 1.23 PA 3,544 2,485 1.43

MO 1,653 1,978 1.20 NY 4,261 3,054 1.40

GA 2,162 2,479 1.15 OH 3,786 2,730 1.39

Table from WashingtonPost

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About bernacmd

For over 24 years, University of Detroit Mercy Marketing Professor Michael Bernacchi, Ph.D., J.D, has produced "uNDER tHE mIKE-rOSCOPE", a newsletter discussing current "marketing and advertising¹s bends, trends & ends." A well-know fixture in Detroit and national media, UDM's marketing guru has made several appearances on CNN's "Talk Back Live," the Voice of America worldwide radio network (VOA), ABC, CBS, NBC, MSNBC and on the pages of Sports Illustrated, Time, TV Guide, the New York Times, USA Today, the Wall Street Journal and the Washington Post, to name a few. At University of Detroit Mercy, he has taught courses in Marketing Management, Consumer Behavior, Marketing Communications, Research and Corporate Social Responsibility and Sports and Entertainment Marketing. Michael Bernacchi can be reached at 313-993-1116 or bernacmd@udmercy.edu. Please appropriately attribute the following for their work on uNDER tHE mIKE-rOSCOPE: Yen Ju Lee Robert Rouse Vidhyasagar Natarajan Eric Baumgardner & Ian Young
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